Refunds, credits and overpayments

A credit

Reduces what somebody owes without money moving — a goodwill adjustment, a rebate, a concession you agreed. It posts as its own entry with a description, so a year later it is obvious why the balance changed.

A refund

Money actually going back. Refunds of card and bank payments are issued through Stripe and appear on the ledger as a reversal of the original payment.

An overpayment

If somebody pays more than they owe, the balance goes negative and they are in credit. It applies against the next charge automatically. There is no separate wallet to reconcile.